Chapter 4 Litecoin mining

How to set up a litecoin miner

Obviously, a brain wallet is the most secure of all these options. Litecoin was created in 2011 by Charlie Lee, a former Google engineer. He modeled it after Bitcoin but with certain modifications intended to help it scale compared to Bitcoin. At the time of writing, the currency has a per-token value of $69.54 and a market rank of #7 with a market capitalization of 4.59 billion.

At today’s price, the profitability of mining Litecoin is significantly less than a few months ago. After reading this guide on how to mine Litecoin, you may decide it isn’t for you. Figure out if you think it is worth the effort to mine Litecoin. It may undoubtedly be easier to mine Litecoin than Bitcoin, but unless the price of Litecoin heads up to over $1000, the rewards are negligible.

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Nowadays, while litecoin mining is still possible, it would be hard to turn a profit using anything but these specially built rigs. As bitcoin gained in value, more people wanted to become miners and increasingly sophisticated systems were created. Soon, specially designed ASIC computing rigs were the only machines powerful enough to mine the coins.

Mining Litecoin provides you with your very own supply, which you can then spend or trade however you like – free of outside restrictions. Litecoin is one of the original ‘pure’ altcoins, forked from bitcoin source code in 2011. Indeed, the upgrade comes when the cryptocurrency users are already concerned about their privacy. Individuals in the crypto ecosystem are growingly concerned about their privacy on the blockchain. Before joining the company, Tara led product for various crypto companies.

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However, for now it’s sufficient to say that using MWEBs on Litecoin will allow for private transactions moving LTC and provide optional confidentiality for users of this blockchain. The first notable implementation detail – and as predicted by Peter Wuille in his 2016 podcast recording – is that MimbleWimble is being included as a sidechain to the existing Litecoin network. This means that there will be a “parallel highway” of blocks called Extension Blocks. Miners will then commit a merkle root – a summary of all transactions from the Extension Block (EB) – on the main Litecoin chain. A mining pool is a group of Litecoin miners who together solve a block and distribute the reward fairly.

  • The current amount that exists is always slowly creeping up, so you want to get involved before it is too late.
  • Rewards drop as more coins reach circulation, as does the difficulty of the hash.
  • An alternative is to join a reputable Litecoin mining pool, sharing the resources and the rewards.
  • Cloud mining
    The safest way to start mining litecoin is by cloud mining.
  • Scrypt was originally invented by Colin Percival for the Tarsnap online backup service.
  • Every halving sees a drop in the number of miners as the blocks become harder to mine and less profitable.
  • However, there are key differences, particularly regarding the proof-of-work mechanism powered by Scrypt and the rapid block generation process.

Even the smallest of factors can play into how much you end up mining and the total amount of crypto you are able to earn while still turning a profit. Even the best rigs need to rest and cool off sometimes, and that means that you do not want to overwork your mining computer. With a mining pool, you do not necessarily have to dedicate 100% of your processing strength towards the mining goals, especially not if you are just wanting to mine crypto as a side hobby. There’s an awful lot of exciting maths going on under the hood with MimbleWimble so I’ll break that down in a future piece.

Mining pools

Similarly, Litecoin is also designed to be a deflationary asset, with only 84 million LTC tokens that will ever be created. However, while a lower financial reward might be less enticing for miners, Litecoin is still well embedded in the top 20 largest cryptocurrencies by market cap, so it’s not a small player. Maybe you want to mine Litecoin and don’t have the means or desire to splurge on expensive hardware. Well, you’re in luck because there’s an option of cloud mining that allows you to pay a remote data center to do the mining for you.

How to set up a litecoin miner

Cloud mining
The safest way to start mining litecoin is by cloud mining. The benefit of cloud mining is that you don’t have to bring any equipment into your own home. This method is ideal for trying out mining before you start with the real deal. In addition to the block reward, miners also receive the transaction fees of all transactions they’ve added in a block. These transaction fees are voluntarilyadded to every litecoin transaction.

The remaining outputs are processing the pegging out transactions and therefore sending a corresponding amount of Litecoin to the specified withdrawal LTC addresses from the pegging-out transactions (D in the diagram). It’s worth noting that the pegged out funds are currently locked on the Litecoin blockchain for 6 blocks in order to provide some additional security for onwards spending. However, this confirmation cap will likely be reviewed once there is data after the activation. The creation of new coins is completed via a special process known as ‘mining’, which is simply a record-keeping service. Litecoin makes sure there is only one blockchain by creating blocks that are really hard to produce. In proof-of-work, miners compete to solve a i want to buy litecoingraphic puzzle in order to add a new block to the blockchain.

If you want to get into mining your own Litecoin, then you need to do it before the cap is hit. The current amount that exists is always slowly creeping up, so you want to get involved before it is too late. But what is mining, and how do you start mining Litecoin properly in a way that can actually turn a profit? Even the most basic elements of Litecoin mining can seem tricky to understand at first, but having the right Litecoin miner configuration can make all the difference.